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Russia’s Reserves “War Chest” surge 41% to stand at over $630 Billion
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Russia’s Reserves “War Chest” surge 41% to stand at over $630 Billion

Edith Muthoni
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Russia’s invasion of Ukraine has been the talk globally for the last few weeks. Now, it seems that the country has been stocking up its reserves for this or just about any other war. has been following up on Russia’s reserves. Data presented from the Central Bank of Russia shows that the gold and foreign reserves in the country’s war chest increased from $448 bn in 2018 to around $630 bn in 2022. This increase roughly translates to a 41% jump over the four years. 

Edith Reads from had this to say about the findings, “It’s clear that Russia has been preparing for war for quite some time. But Russia’s government made a huge mistake by having foreign reserves make up the majority of the war chest- a decision I’m sure the government quite regrets but has turned out to be for the best for other countries, and especially Ukraine.”

Building the Kremlin War Chest: two decade’s worth of reserves

Further analysis of the data shows that the Kremlin has been stoking up its war chest for over two decades. Ever since Putin came into power in 2000, the country’s reserves have been on a steady upward trajectory. 

Findings from the data compiled by show that Putin first focused on learning the Soviet Union’s debt history. When the Kremlin achieved this in 2006, efforts moved towards building the war reserve. In the wake of the Russo-Georgian war, the war chest grew from $2 bn in 2006 to around $5 bn in 2008. The 2009 global financial crisis saw the reserves drop to slightly below $4 bn before crossing the $5 bn mark again, just before the annexation of Crimea

Now, it seems that the Russian government has been ramping up its efforts to increase the reserves ever since 2015. The war reserves have almost doubled since 2015’s $376 bn to today’s $630 bn. 

A plan gone wrong? 

It’s clear that Putin has made some significant effort towards protecting the Russian economy by using the reserves as a source of stability. However, the Kremlin’s major flaw was holding more than half of these reserves in foreign banks, as the government now cannot access these funds. 

Following the Russian invasion of Ukraine, the US, together with allies such as Japan and the EU, have moved sanctions to block Russia from accessing these war chests. Although similar sanctions have been issued before, none have been quite as powerful. 

The allies first announced a freeze on Russia’s accounts on 26th February. However, the heightened war against Ukraine constituted more severe penalties against Russia. On 7th March, the US and its European allies announced new sanctions to cripple the Russian economy. Some measures include banning American and EU citizens from trading with the Russian Central bank and personal sanctions against powerful Russian elites, including Putin himself. 

The impending doom on Russia’s economy

Russia still has access to about 13% of its reserves, held in Chinese banks. However, since private companies like Facebook and Twitter have also moved against Russia, the available reserves might not help Russia. 

The effects of the restrictions can already be felt on the Russian economy. Following the first attacks on Ukraine, Russians flocked to change their rubles to dollars and euros ahead of the expected western sanctions. 

The Russian economy is already on a downfall, with the central bank increasing its interest rates from 9.5% to 20% on 7th March. The Russian ruble also hit an all-time low on the same day, losing almost 50% of its value since the year began. 

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Edith Muthoni

Edith Muthoni

Edith is a finance expert who has been writing and trading for years. She's knowledgeable about stocks, cryptocurrencies, blockchain technology as well the latest fintech trends - all from an informed perspective that will help you make better decisions when it comes time to invest your money.